BLOCKCHAIN MOON ACQUISITION CORP. Management’s Discussion and Analysis of Financial Condition and Results of Operations (form 10-Q)

References in this report (the “Quarterly Report”) to “we,” “us” or the
“Company” refer to Blockchain Moon Acquisition Corp. References to our
“management” or our “management team” refer to our officers and directors, and
references to the “Sponsor” refer to Jupiter Sponsor, LLC. The following
discussion and analysis of the Company’s financial condition and results of
operations should be read in conjunction with the financial statements and the
notes thereto contained elsewhere in this Quarterly Report. Certain information
contained in the discussion and analysis set forth below includes
forward-looking statements that involve risks and uncertainties.

Special Note Regarding Forward-Looking Statements

This Quarterly Report includes “forward-looking statements” within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act
that are not historical facts and involve risks and uncertainties that could
cause actual results to differ materially from those expected and projected. All
statements, other than statements of historical fact included in this Form 10-Q
including, without limitation, statements in this “Management’s Discussion and
Analysis of Financial Condition and Results of Operations” regarding the
completion of the Proposed Business Combination (as defined below), the
Company’s financial position, business strategy and the plans and objectives of
management for future operations, are forward-looking statements. Words such as
“expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek” and variations
and similar words and expressions are intended to identify such forward-looking
statements. Such forward-looking statements relate to future events or future
performance, but reflect management’s current beliefs, based on information
currently available. A number of factors could cause actual events, performance
or results to differ materially from the events, performance and results
discussed in the forward-looking statements, including that the conditions of
the Proposed Business Combination are not satisfied. For information identifying
important factors that could cause actual results to differ materially from
those anticipated in the forward-looking statements, please refer to the Risk
Factors section of the Company’s Annual Report on Form 10-K filed with the U.S.
Securities and Exchange Commission (the “SEC”) on April 14, 2022 and the
Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2022
filed with the SEC on May 16, 2022. The Company’s securities filings can be
accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as
expressly required by applicable securities law, the Company disclaims any
intention or obligation to update or revise any forward-looking statements
whether as a result of new information, future events or otherwise.

Overview

We are a recently organized blank check company incorporated in Delaware on
January 22, 2021. We were formed for the purpose of effecting a merger, share
exchange, asset acquisition, share purchase, reorganization or similar business
combination with one or more businesses. We have not selected any specific
business combination target and we have not, nor has anyone on our behalf,
initiated any substantive discussions, directly or indirectly, with any business
combination target. While we may pursue an initial business combination target
in any business, industry or geographical location, we intend to focus our
search on high growth businesses in blockchain technologies in North America,
Europe, and Asia.

On October 21, 2021, we consummated our initial public offering of 10,000,000
units at $10.00 per unit, and the sale of 400,000 units to our sponsor, at a
price of $10.00 per unit in a private placement that closed simultaneously with
the initial public offering. Each Unit consists of one share of common stock,
one warrant and one right. Each right entitles the holder thereof to receive
one-tenth (1/10) of one share of common stock upon the consummation of an
initial business combination. Each warrant entitles the registered holder to
purchase one-half (1/2) of a share of common stock at a price of $11.50 per full
share, subject to certain adjustments. Our management has broad discretion with
respect to the specific application of the net proceeds of the initial public
offering and the private units, although substantially all of the net proceeds
are intended to be generally applied toward consummating a business combination.
The underwriters have a 45-day option from the date of initial public offering
to purchase up to an additional 1,500,000 units to cover over-allotments, if
any. On October 26, 2021 the underwriters fully exercised their over-allotment
option.

Upon the closing of the initial public offering (including the underwriter’s
over-allotment option) and the private placement, $115,000,000 was placed in a
trust account.

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We will have only 12 months from the closing of our initial public offering (or
up to 18 months from the closing of the initial public offering if we extend the
period of time to consummate a business combination by the maximum amount) to
complete our initial business combination (the “Combination Period”). If we are
unable to complete an initial business combination within such period, it will:
(i) cease all operations except for the purpose of winding up, (ii) as promptly
as reasonably possible but not more than ten business days thereafter, redeem
the public shares, at a per-share price, payable in cash, equal to the aggregate
amount then on deposit in the Trust Account, including interest (which interest
shall be net of taxes payable, and less up to $100,000 of interest to pay
dissolution expenses) divided by the number of then issued and outstanding
public shares, which redemption will completely extinguish public stockholders’
rights as stockholders (including the right to receive further liquidation
distributions, if any), subject to applicable law, and (iii) as promptly as
reasonably possible following such redemption, subject to the approval of our
remaining stockholders and our board of directors, liquidate and dissolve,
subject in each case to our obligations under Delaware law to provide for claims
of creditors and the requirements of other applicable law. There will be no
redemption rights or liquidating distributions with respect to our rights, which
will expire worthless if we fail to complete our initial business combination
within the Combination Period.

We cannot assure you that our plans to complete our initial business combination
will be successful.

Results of Operations

Our entire activity since inception up to June 30, 2022 was in preparation for
our initial public offering and searching for a business combination target. We
will not generate any operating revenues until the closing and completion of our
initial business combination, at the earliest.

For the three months ended June 30, 2022, we had a net loss of $230,396, which
consists of operating costs of $433,676, and provision for income taxes of
$16,472, offset by interest income on marketable securities held in the Trust
Account of $176,231, change in fair value of warrant liabilities of $43,521.

For the three months ended June 30, 2022, we had a net loss of $666,877, which
consists of operating costs of $974,915, and provision for income taxes of
$16,472, offset by interest income on marketable securities held in the Trust
Account of $201,068, change in fair value of warrant liabilities of $123,442.

For the three months ended June 30, 2021, we had net loss of $977, which
consisted of formation and operating costs.

For the period from January 22, 2021 through June 30, 2021, we had net loss of
$1,600, which consisted of formation and operating costs.

Going Concern and Liquidity

As of June 30, 2022, we had $354,114 in cash and a working capital of $77,022.
Prior to the consummation of our initial public offering, our liquidity needs
were satisfied through receipt of a $25,000 capital contribution from our
sponsor in exchange for the issuance of the Founder Shares to our sponsor, and a
$250,000 in note payable to our sponsor. Subsequent to the consummation of the
initial public offering, we received the net proceeds not held in the Trust
Account of approximately $1.4 million.

We have incurred and expect to continue to incur significant costs in pursuit of
our financing and acquisition plans. If we are unable to raise additional
capital, we may be required to take additional measures to conserve liquidity,
which could include, but not necessarily be limited to, suspending the pursuit
of a business combination. We cannot provide any assurance that new financing
will be available to us on commercially acceptable terms, if at all.

In addition, in order to finance transaction costs in connection with a business
combination, our sponsor or an affiliate of our sponsor, or certain of our
officers and directors may, but are not obligated to, loan us working capital
loans. Except for the foregoing, the terms of such working capital loans, if
any, have not been determined and no written agreements exist with respect to
such loans. The working capital loans would either be repaid upon consummation
of a business combination, without interest, or, at the lender’s discretion, up
to $1.5 million of such working capital loans may be convertible into warrants
at a price of $10.00 per unit. The units would be identical to the private
placement units. As of June 30, 2022, we have no borrowings under the Working
Capital Loans.

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In connection with our assessment of going concern considerations in accordance
with Financial Accounting Standard Board’s Accounting Standards Codification
(“ASC”) Topic 205-40, “Basis of Presentation – Going Concern, we have until
October 21, 2022 (absent any extensions of such period by the Sponsor, pursuant
to the terms described above) to consummate the proposed business combination.
It is uncertain that we will be able to consummate the proposed business
combination by this time. If a business combination is not consummated by this
date, there will be a mandatory liquidation and subsequent dissolution.
Management has determined that the liquidity condition and mandatory
liquidation, should a business combination not occur, and potential subsequent
dissolution, raises substantial doubt about our ability to continue as a going
concern. No adjustments have been made to the carrying amounts of assets or
liabilities should we be required to liquidate after October 21, 2022. We intend
to complete the proposed business combination before the mandatory liquidation
date. However, there can be no assurance that we will be able to consummate any
business combination by October 21, 2022.

Registration Rights

The holders of the Founder Shares, Private Units, Unit Purchase Option (the
“UPO”), and units that may be issued on conversion of Working Capital Loans or
Extension Loans (and any securities underlying the Private Units, the UPO, or
units issued upon conversion of the Working Capital Loans or Extension Loans)
will be entitled to registration rights pursuant to a registration rights
agreement to be signed prior to or on the effective date of the initial public
offering requiring us to register such securities for resale (in the case of the
Founder Shares, only after redemption to the Company’s common stock). The
holders of these securities are entitled to make up to three demands, excluding
short form demands, that we register such securities. In addition, the holders
have certain “piggy-back” registration rights with respect to registration
statements filed subsequent to our completion of its initial business
combination and rights to require us to register for resale such securities
pursuant to Rule 415 under the Securities Act. Furthermore, notwithstanding the
foregoing, pursuant to FINRA Rule 5110, Chardan Capital Markets, LLC (the
representative of the underwriters) may not exercise its demand and “piggyback”
registration rights after five and seven years, respectively, after the
effective date of the registration statement of which this prospectus forms a
part and may not exercise its demand rights on more than one occasion.

Underwriters Agreement

The underwriters had a 45-day option from the date of IPO to purchase up to an
additional 1,500,000 units to cover over-allotments at $10.00 per unit, if any.
On October 26, 2021 the underwriters exercised the over-allotment option in
full, resulting in total gross proceeds to the Company of $15,000,000, and
incurred $300,000 of underwriting commissions, and $525,000 of deferred
underwriting commissions.

The underwriters were entitled to a cash underwriting discount of two percent
(2%) of the gross proceeds of the Proposed Public Offering, or $2,000,000 (or up
to $2,300,000 if the underwriters’ over-allotment is exercised in full). On
October 21, 2021 and October 26, 2021, the Company paid a cash underwriting
commissions of $2,300,000 and recorded it as offering costs.

The underwriters are entitled to a deferred underwriting discount of 3.5% of the
gross proceeds of the IPO held in the Trust Account, or $4,025,000 in the
aggregate, upon the completion of the Company’s initial Business Combination
subject to the terms of the underwriting agreement, which were accounted as
deferred underwriters’ discount.

Critical Accounting Policies

The preparation of these financial statements in conformity with US GAAP
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
expenses during the reporting period. Actual results could differ from those
estimates.

Common Stock Subject to Possible Redemption

We account for our Class A common stock subject to possible redemption in
accordance with the guidance in Accounting Standards Codification (“ASC”) Topic
480 “Distinguishing Liabilities from Equity.” Shares of Class A common stock
subject to mandatory redemption is classified as a liability instrument and is
measured at fair value. Conditionally redeemable common stock (including common
stock that feature redemption rights that is either within the control of the
holder or subject to redemption upon the occurrence of uncertain events not
solely within our control) is classified as temporary equity. At all other
times, common stock is classified as stockholders’ equity. Our Class A common
stock features certain redemption rights that are considered to be outside of
our control and

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subject to occurrence of uncertain future events. Accordingly, shares of Class A
common stock subject to possible redemption are presented as temporary equity,
outside of the stockholders’ equity section of our balance sheet.

Net Income (Loss) Per Common Share

We apply the two-class method in calculating earnings per share. Net income per
common share, basic and diluted for Class A redeemable common stock is
calculated by dividing the interest income earned on the Trust Account, net of
applicable franchise and income taxes, by the weighted average number of Class A
redeemable common stock outstanding for the period. Net loss per common share,
basic and diluted for Class A and Class B common stock is calculated by dividing
the net income, less income attributable to Class A redeemable common stock, by
the weighted average number of Class A and Class B non-redeemable common stock
outstanding for the period presented.

Warrant Liability

We account for our warrants as either equity-classified or liability-classified
instruments based on an assessment of the warrant’s specific terms and
applicable authoritative guidance in ASC 480, Distinguishing Liabilities from
Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The
assessment considers whether the warrants are freestanding financial instruments
pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and
whether the warrants meet all of the requirements for liability classification
under ASC 815. This assessment, which requires the use of professional judgment,
is conducted at the time of warrant issuance and as of each subsequent quarterly
period end date while the warrants are outstanding.

Our Private Placement Warrants meet the criteria as liability classified
derivative instruments and are recorded at fair value on the grant date and
re-valued at each reporting date, with changes in the fair value reported in the
statements of operations. We will continue to adjust the liability for changes
in fair value until the earlier of the exercise or expiration of the Private
Placement Warrants. At that time, the portion of the liability related to the
Private Placement Warrants will be reclassified to additional paid-in capital.

Recent Accounting Standards

In August 2020, the Financial Accounting Standards Board (“FASB”) issued
Accounting Standards Update (“ASU”) 2020-06, Debt – Debt with Conversion and
Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in
Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”) to simplify accounting for
certain financial instruments. ASU 2020-06 eliminates the current models that
require separation of beneficial conversion and cash conversion features from
convertible instruments and simplifies the derivative scope exception guidance
pertaining to equity classification of contracts in an entity’s own equity. The
new standard also introduces additional disclosures for convertible debt and
freestanding instruments that are indexed to and settled in an entity’s own
equity. ASU 2020-06 amends the diluted earnings per share guidance, including
the requirement to use the if-converted method for all convertible instruments.
ASU 2020-06 is effective January 1, 2024 and should be applied on a full or
modified retrospective basis, with early adoption permitted beginning on January
1, 2021.

Management does not believe that any recently issued, but not effective,
accounting standards, if currently adopted, would have a material effect on our
financial statements.

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